Teaching your Children about Good Money Habits

It is never too early to start teaching your children about good money habits. By instilling good spending and budgeting habits in your children at a young age, you are preparing them for the future. Helping them to develop good money habits can be fairly simple, so avoid complex lessons until they are older and can understand the importance of money and budgeting.

One great way to teach your children good money habits is to give them an allowance. Do not give them an allowance for doing nothing - this can defeat the purpose. Children benefit from learning that money is earned by working. A kindergartner is able to help with small chores around the house, so put them to work and let them earn their allowance this way.

Another way to earn money would be to hold a lemonade stand in front of the house, with adult supervision. Your child will learn how to make the product, market it and sell it. While the idea is to teach good money habits, they are also learning valuable life lessons – nothing sells itself.

Have your children save up their allowance for something that they really want. Whether it is a comic book or the hottest new toy on the market, having your child save up for the item will teach them that nothing comes for free. In return, children also learn that the items you buy them have real value and should be treated as such.

If your child really wants an item, it is also good to help them meet the value of the toy. For example, they can earn the toy by doing certain chores for a month: keeping their rooms clean, feeding the animals or doing other small chores.

Another good educational opportunity is to expose your child to money. A lot of children nowadays are so used to seeing parents pay with debit and credit cards that they may not know what actual money looks like. Show your kids the different types of money – coins, bills, etc. and tell them the monetary amount for each.

When you go shopping, let your child have a try at paying certain items. This will help them feel quite grown up and give them a good lesson in money matters.

Teaching your children good money habits early on in life helps to stress the importance of preparing for a financial future. Oftentimes parents do not instill the proper money management skills into their children, unaware that this is an important life lesson. It is never too early or too late to start teaching your children how to establish good money habits.